WASHINGTON (AP) – Dec. 16, 2009 – Construction of new homes, helped by better weather, rebounded in the U.S. in November following a setback in the previous month.
The gain is a hopeful sign that the housing recovery is continuing, a development viewed as critical to lifting the overall economy out of recession.
The Commerce Department says construction of new homes and apartments rose 8.9 percent in November to a seasonally adjusted annual rate of 574,000 units. The gain represented strength in all areas of the country although the increase was slightly lower than economists had expected.
Applications for new building permits were also up, rising 6 percent to an annual rate of 584,000 units, a stronger showing than economists predicted.
Copyright © 2009 The Associated Press, Martin Crutsinger, AP economics writer
Thursday, December 17, 2009
Tuesday, December 8, 2009
Buyer tax credit effective but not available
WASHINGTON – Dec. 7, 2009 – With President Obama’s signature on Nov. 6, 2009, the first-time homebuyer tax credit was extended, and some move-up buyers became eligible for up to $6,500 starting on Dec. 1, 2009.
However, the new law changed the way a home sale must be documented to the Internal Revenue Service (IRS), including additional back-up information to minimize the chance of fraud. And that documentation change became effective immediately when the bill was signed.
But that new form is not yet available.
The homebuyer tax credit is claimed using IRS Form 5405, and that won’t change under the new program; however, Form 5405 must be revised to adhere to rules in the law signed Nov. 6.
Currently, the IRS has only the old version of Form 5405 on its website – the one that applies to sales that took place Nov 6, 2009, or earlier. The revised Form 5405 applicable to sales on Nov. 7, 2009, and later, will not be on the IRS website, according to IRS officials, until late December.
Buyers who close after Nov. 6 and use the old claim form may have trouble collecting their tax credit quickly.
For more information on the tax credit and Form 5405, visit the IRS website.
© 2009 Florida Realtors®
However, the new law changed the way a home sale must be documented to the Internal Revenue Service (IRS), including additional back-up information to minimize the chance of fraud. And that documentation change became effective immediately when the bill was signed.
But that new form is not yet available.
The homebuyer tax credit is claimed using IRS Form 5405, and that won’t change under the new program; however, Form 5405 must be revised to adhere to rules in the law signed Nov. 6.
Currently, the IRS has only the old version of Form 5405 on its website – the one that applies to sales that took place Nov 6, 2009, or earlier. The revised Form 5405 applicable to sales on Nov. 7, 2009, and later, will not be on the IRS website, according to IRS officials, until late December.
Buyers who close after Nov. 6 and use the old claim form may have trouble collecting their tax credit quickly.
For more information on the tax credit and Form 5405, visit the IRS website.
© 2009 Florida Realtors®
Tuesday, December 1, 2009
US Treasury sets guidance to simplify 'short sales'
Below is an article which states the U.S. Treasury has finally set the guidelines for their "short sale" plan. Although there is nothing posted on the U.S. Treasury's website yet, we are expecting the details to be released shortly at www.financialstability.gov. Please reference this website for the full details of the plan. Thanks.
Danielle Blake
Vice President of Government Affairs
REALTOR® Association of Greater Miami & the Beaches
US Treasury sets guidance to simplify 'short sales'
Article By Al Yoon
NEW YORK, Nov 30 (Reuters) - The U.S. Treasury on Monday set long-awaited guidance on a plan for mortgage companies to speed "short sales" of homes and other loan modification alternatives to stem a rising tide of foreclosures.
The Home Affordable Foreclosure Alternatives Program provides financial incentives and simplifies the procedures for completing short sales, a growing practice in which a lender agrees to accept the sale price of a home to pay off a mortgage even if the price falls short of the amount owed, according to an announcement on the Treasury's website.
Guidelines address barriers that have often sidelined short sales by setting limits on the time it takes a bank to approve an offer, freeing borrowers from debt and capping claims of subordinate lenders.
The incentives, first announced in May, expand on the government's Home Affordable Modification Program, known as HAMP, that has seen limited success in lowering payments for distressed homeowners. The Treasury earlier on Monday stepped up pressure on mortgage companies to make permanent the 650,000 trial modifications they have started. See:
http://www.financialstability.gov/latest/tg_11302009b.htm
"While HAMP program guidelines are intended to reach a broad range of at-risk borrowers, it is expected that servicers will encounter situations where they are unable to approve" or offer a modification, the Treasury said in its announcement.
Financial incentives for completing short sales or similar deed-in-lieu transactions -- in which the deed is simply transferred to the lender -- include a $1,000 payment to servicers, and a maximum of $1,000 to go to investors who sign off on payments to subordinate lien holders, the Treasury said. Borrowers would receive $1,500 in relocation expenses.
Short sales are favored by real estate agents and community groups over foreclosure because they can preserve the borrower's credit rating and leave the property in better condition than when a homeowner is evicted. While primary lenders typically realize steep losses, their recovery is typically far better than under foreclosure.
But short sales have been frustrating for borrowers and real estate agents, often hung up by negotiations with multiple lien holders and mortgage insurance companies. Real estate agents have complained that sales fall through as lenders bicker over the sales price, what they should receive from the proceeds, and whether the borrower will be held accountable for the debt in the future.
Among requirements, mortgage servicers have 10 days to approve or disapprove a request for short sale, and when done the transaction must fully release the borrower from the debt. It also prohibits mortgage servicing companies from reducing real estate commissions on the sale, a practice that has dissuaded many agents from taking short sale listings. In one of the most contentious issues gumming up negotiations between lenders, the guidance caps the aggregate proceeds to subordinate lien holders at $3,000.
Second lien holders in recent months have begun demanding more money from the first lender, seller, buyer or agent in exchange for releasing their claim, agents have said. Because primary lenders would face larger losses in a foreclosure, some subordinate lenders have felt empowered, the agents said.
The largest second-lien holders are Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co and Citigroup Inc.
Second lien holders may proceed with a short sale outside of the Treasury program, if they felt the cap was too low, a Treasury official said in October.
"If there was a short sale program that didn't recognize the second lien holder position, it could have pretty damaging consequences for the industry," Sanjiv Das, chief executive officer of CitiMortgage, said in an interview last week.
(Editing by Leslie Adler) ((albert.yoon@thomsonreuters.com; +1 646-223-6347; Reuters Messaging: albert.yoon.reuters.com@reuters.net))
Danielle Blake
Vice President of Government Affairs
REALTOR® Association of Greater Miami & the Beaches
US Treasury sets guidance to simplify 'short sales'
Article By Al Yoon
NEW YORK, Nov 30 (Reuters) - The U.S. Treasury on Monday set long-awaited guidance on a plan for mortgage companies to speed "short sales" of homes and other loan modification alternatives to stem a rising tide of foreclosures.
The Home Affordable Foreclosure Alternatives Program provides financial incentives and simplifies the procedures for completing short sales, a growing practice in which a lender agrees to accept the sale price of a home to pay off a mortgage even if the price falls short of the amount owed, according to an announcement on the Treasury's website.
Guidelines address barriers that have often sidelined short sales by setting limits on the time it takes a bank to approve an offer, freeing borrowers from debt and capping claims of subordinate lenders.
The incentives, first announced in May, expand on the government's Home Affordable Modification Program, known as HAMP, that has seen limited success in lowering payments for distressed homeowners. The Treasury earlier on Monday stepped up pressure on mortgage companies to make permanent the 650,000 trial modifications they have started. See:
http://www.financialstability.gov/latest/tg_11302009b.htm
"While HAMP program guidelines are intended to reach a broad range of at-risk borrowers, it is expected that servicers will encounter situations where they are unable to approve" or offer a modification, the Treasury said in its announcement.
Financial incentives for completing short sales or similar deed-in-lieu transactions -- in which the deed is simply transferred to the lender -- include a $1,000 payment to servicers, and a maximum of $1,000 to go to investors who sign off on payments to subordinate lien holders, the Treasury said. Borrowers would receive $1,500 in relocation expenses.
Short sales are favored by real estate agents and community groups over foreclosure because they can preserve the borrower's credit rating and leave the property in better condition than when a homeowner is evicted. While primary lenders typically realize steep losses, their recovery is typically far better than under foreclosure.
But short sales have been frustrating for borrowers and real estate agents, often hung up by negotiations with multiple lien holders and mortgage insurance companies. Real estate agents have complained that sales fall through as lenders bicker over the sales price, what they should receive from the proceeds, and whether the borrower will be held accountable for the debt in the future.
Among requirements, mortgage servicers have 10 days to approve or disapprove a request for short sale, and when done the transaction must fully release the borrower from the debt. It also prohibits mortgage servicing companies from reducing real estate commissions on the sale, a practice that has dissuaded many agents from taking short sale listings. In one of the most contentious issues gumming up negotiations between lenders, the guidance caps the aggregate proceeds to subordinate lien holders at $3,000.
Second lien holders in recent months have begun demanding more money from the first lender, seller, buyer or agent in exchange for releasing their claim, agents have said. Because primary lenders would face larger losses in a foreclosure, some subordinate lenders have felt empowered, the agents said.
The largest second-lien holders are Bank of America Corp, Wells Fargo & Co, JPMorgan Chase & Co and Citigroup Inc.
Second lien holders may proceed with a short sale outside of the Treasury program, if they felt the cap was too low, a Treasury official said in October.
"If there was a short sale program that didn't recognize the second lien holder position, it could have pretty damaging consequences for the industry," Sanjiv Das, chief executive officer of CitiMortgage, said in an interview last week.
(Editing by Leslie Adler) ((albert.yoon@thomsonreuters.com; +1 646-223-6347; Reuters Messaging: albert.yoon.reuters.com@reuters.net))
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